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While cash compensation is certainly a key factor in a firm’s ability to attract and retain talent, for today’s workforce it’s typically not the most important one. Today’s employee is looking for a mix of compensation and benefits that, together, reflect their performance and contributions toward firm goals, allow them to achieve work-life balance, and help them work toward securing their financial future.

Consider these questions as you assess the effectiveness of your current compensation strategy:

1. Are you offering competitive pay for each role within your firm?
It’s important to understand industry compensation benchmarks and trends for specific roles within the advisory industry when evaluating the competitiveness of your compensation strategy. In addition, you may consider adjusting the industry benchmarks for local labor market conditions to get a truer picture of what individuals are being paid.

2. Are you leveraging a mix of fixed and variable pay as part of your compensation strategy? Fixed compensation is typically the base salary or hourly rate for a position. Variable or incentive pay can be broken out into two categories, performance-based and discretionary. Approximately 50% of advisory firms are leveraging incentive pay as part of their overall compensation strategy. The degree to which incentive pay is used varies by position. In general, performance-based incentives are utilized more often with revenue-generating roles and discretionary awards for support roles. Depending on the role, you may decide to use a mix of both given the behaviors and performance you are hoping to incent.

3. What benefits do you offer to your employees? Benefits can be a nice complement to cash compensation and, for example, in the form of a retirement plan contribution match or flexible spending account can actually offer more value to securing their financial future. Other, more nontraditional benefits may include the ability to work remotely, flex time, back-up child care, paid time off for volunteer work, and more.

4. Do you offer any perks for certain levels of achievement or milestones reached? You may be surprised at how something like a paid vacation after a certain length of service, or a sabbatical can drive engagement and loyalty within your team. Be creative; perks don’t need to be incredibly expensive to make an impact.

Traditional compensation is just one of many levers available to an advisory firm to motivate and retain talent. Seek to move the conversation from traditional to total compensation inclusive of cash compensation, incentive pay, rewards, recognition, and benefits.

For more information on what compensation looks like for roles within an advisory firm, visit fainsight.com to purchase a copy of The 2017 FA Insight Study of Advisory Firms: People and Pay.

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